When Alberta’s premier Rachel Notley announced a hard cap on carbon emissions to fight climate change last November, she was joined by execs from environmental groups and oil sands companies who came together in support of the policy.
“To me, what was important wasn’t only the policy,” said Brian Ferguson, CEO of Cenovus Energy, and one of the guys on stage that day. “We showed that the conversation about oil could be collaborative, not combative.”
Granted, there were angry complaints from advocates who’d argued for years that oil production and consumption was an ‘all or nothing’ proposition (and hadn’t participated in the latest negotiations). Ferguson is one of the energy industry leaders who not only understands that it’s unacceptable simply to agree to disagree on the issue, but that his company can show what’s possible by example.
“Cenovus absolutely recognizes and shares the public’s concern about climate change,” he explained. “Why shouldn’t we put our minds together to make oil a better product instead of presuming we could pole vault over it, and get to using renewables exclusively?”
“If we could produce oil without emissions, we would do that. That’s our goal.”
Already, Cenovus has reduced carbon emissions resulting from its average oil sands production of 150,000 barrels/day by about a third since 2004 (emissions from its projects are nearly half the average for the oil sands industry overall). Innovation has played a huge role in this improvement, many of the developments centering on ways to reduce the steam it uses to separate oil from sand.
It was the first to commercially implement a process called SAGD, which doesn’t involve open pit mines or tailings ponds, and instead allows for the extraction to take place beneath the forest floor. A new technology, called SAP, promises to reduce emissions by 25% while increasing productivity by a third or more via a solvent that does some of the work currently accomplished with steam.
Cenovus also operates the world’s largest CO2 storage site at one of its conventional oil projects, safely storing approximately 27 million metric tons of carbon gas to date that would otherwise have ended up in the atmosphere.
“Reducing emissions is a business metric that’s written into my performance agreement, along with safety, because what’s good for the environment is also good for capital and operating costs,” Ferguson said.
“I think people would be surprised how aligned those interests can be.”
To make that alignment a cultural value, Cenovus asks staff at all levels to think about the environment in all that they do. For example the company hosts regular meetings and bi-annual innovation summits, at which it pulls together nearly 2,000 employees to share ideas about innovating every aspect of its business. It’s encouraging a new generation of employees who are attracted to its focus on finding solutions to “big” public policy issues.
The company also helped found Canada’s Oil Sands Innovation Alliance (COSIA), and is leading a project to explore capturing CO2, and then using it to generate electricity. COSIA is also co-sponsoring the Carbon X Prize, which is offering $20 million to help fund ways to convert CO2 into usable products.
Such actions evidence innovating the ongoing conversation about oil as much as any technology specifics.
“I remember one of the more contentious meetings we had with environmental groups last year,” Ferguson said. “I made the point that regardless of whether we would be able to come to a common understanding, that I was going to do everything I could to improve our environmental performance, because it was the right thing to do.”
“We weren’t going to wait for new laws or policies.”